Obama hands copies of his speech to Biden and Speaker of the House Nancy Pelosi.

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"One year later, the worst of the storm has passed, but the devastation remains," Obama tells the joint session of Congress.

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Obama calls for the nation to "start anew."

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Members of the U.S. Supreme Court listen to Obama's speech.

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Senate Majority Leader Harry Reid listens to Obama.

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When the president said he would be open to suggestions on health reform, House Republican Leader John Boehner raised his hand. Here, Texas Republican Rep. Louie Gohmert (from left), House Minority Whip Eric Cantor of Virginia and Boehner share smiles.

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Democrats (from right) House Majority Leader Steny Hoyer of Maryland, House Majority Whip James Clyburn of South Carolina, and Connecticut Rep. John Larson applaud.

The president shakes hands on his way out of the chamber following his speech.

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President Obama in his first State of the Union address acknowledged Wednesday the deepening cynicism Americans feel toward their government and called for mending what he characterized as a "deficit of trust."

Hear Gov. McDonnell's Speech

At a time when the nation's unemployment rate remains a stubborn 10 percent, Obama characterized jobs as his administration's No. 1 focus and called for a new jobs bill. Polls show that the economy is the top issue for most Americans.

But the president asserted that, having inherited two wars and a historic financial mess, the immediate and aggressive work of his administration — even the "hated" bank bailout — helped the nation avert an economic depression, though the nation remains deeply damaged.

"One year later, the worst of the storm has passed," Obama said before a joint session of Congress on Capitol Hill. "But the devastation remains."

In a speech salted with language he has used in past efforts to summon a divided nation to unity, the president also laid out a plan he says will help rebuild the economy with tax incentives and jobs initiatives. He vowed to work with Congress to repeal Don't Ask, Don't Tell, the military policy that bans openly gay, lesbian and bisexual people from serving. And he pledged to get his derailed health care overhaul initiative back on track.

"By the time I'm finished speaking tonight, more Americans will have lost their health insurance," Obama said. "Millions will lose it this year."

"I will not walk away from these Americans," he added. "And neither should the people in this chamber."

Over the past year, the divisive health care debate has consumed the president, sapping his political capital. It now threatens to end in failure. Public support for the initiative has plummeted, and his party's own leaders on Capitol Hill have been trading barbs over the stalled legislation.

"This is a complex issue, and the longer it was debated, the more skeptical people became," Obama said, taking a share of blame for failing to explain its aims clearly to Americans.

While his recommitment to the issue answers calls from his party's base to stay the course, Obama was noticeably short on detail about how he planned to rally even his own fractious party to the health care cause — especially since Democrats recently lost their 60-vote Senate supermajority.

Virginia Gov. Bob McDonnell, who delivered the official Republican response, indicated that his party members in Washington are unlikely to budge on their unanimous opposition to the health care legislation.

"All Americans agree we need a health care system that is affordable, accessible and high-quality," he said. "But most Americans do not want to turn over the best medical care system in the world to the federal government."

Acknowledging Angry Voters

McDonnell also sought to contrast Republicans' view of the role of government with that of the president's, using language that harkened back to arguments the GOP has consistently made against the health care legislation.

Virginia Gov. Bob McDonnell gestures to his wife before delivering the Republican response to the State of the Union in the Virginia House of Delegates chambers at the Capitol in Richmond, Va.
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Virginia Gov. Bob McDonnell gestures to his wife before delivering the Republican response to the State of the Union in the Virginia House of Delegates chambers at the Capitol in Richmond, Va.

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"Top-down, one-size-fits-all decision-making should not replace the personal choices of free people in a free market," he said, "nor undermine the proper role of state and local governments in our system of federalism."

McDonnell's comments reflected the growing anti-big government, populist sentiment that helped put him in office last November. Acknowledging this anger among voters, Obama pledged to start reining in government spending and called for the reinstatement of the pay-as-you go rule that was key to the budget surpluses of the 1990s.

The president also offered up a menu of proposed targeted tax cuts and hiring incentives for small businesses.

Obama's plan includes a controversial, three-year discretionary spending freeze that members of his own party say will hamper his agenda. It also calls for the creation, by executive order, of a fiscal commission that would recommend ways to reduce the nation's historically high deficit.

Hear NPR's Post-Speech Call-In Special

The moves — including the freeze, which McDonnell characterized as "a laudable step, but a small one" — were the president's clearest attempt to link growing fears about runaway spending with eroding trust in government.

"We face more than a deficit of dollars right now," Obama said. "We face a deficit of trust —- deep and corrosive doubts about how Washington works that have been growing for years."

Jobs, Jobs, Jobs

The president provided a forceful defense of the work his administration has done to pull the nation's economy back from the brink, including touting jobs saved or created by his $787 billion stimulus package, tax cuts made in the past year, and new growth reported in the nation's gross domestic product.

Obama acknowledged the deepening cynicism Americans feel toward their government and called for mending what he characterized as a "deficit of trust."
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Obama acknowledged the deepening cynicism Americans feel toward their government and called for mending what he characterized as a "deficit of trust."

Alex Wong/Getty Images

He said the health insurance overhaul was vital to the long-term economic health of the nation and laid out steps he planned to take to generate new jobs. His plan includes small-business tax cuts, a reduction in corporate taxes this year and next, and incentives to encourage businesses to hire workers and provide better wages.

"I'm proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small business the credit they need to stay afloat," he said. The new business tax credit will go to small businesses that hire new workers or raise wages. And he called for the elimination of capital-gains taxes on small businesses.

He also called for jobs created through national infrastructure projects, government investments in clean energy jobs, and a doubling of exports with help from a new "national export initiative."

Obama's Challenges

New NPR poll finds President Obama with a 49 percent approval rating. Of those surveyed, 55 percent said they opposed Obama's proposed health care overhaul.

Both the latest NPR poll and a new poll from the Pew Center for the People & the Press found that the top priorities for Americans this year are the economy, jobs, and terrorism.

New CNN poll finds 60 percent of Americans say Obama paid more attention to bankers' problems than those of middle class.

Republicans say the president should shift from health care and focus on jobs, debt and terrorism.

Supporters want Obama to stay the course and make the connection between his proposed health care overhaul and the middle class.

First-Year Disappointments

With polls showing the American electorate overwhelmingly frustrated with partisan gridlock on Capitol Hill, the president acknowledged the frustration of those who put him in office.

"I never thought the mere fact of my election would usher in peace, harmony and some post-partisan era," he said. "I knew that both parties have fed divisions that are deeply entrenched."

"I will not give up on changing the tone of our politics," he said, while acknowledging that it is an election year. And he issued a challenge to his fellow Democrats: "I would remind you that we still have the largest majority in decades and the people expect us to solve some problems, not run for the hills."

He called for monthly meetings with House and Senate leaders on both sides of the aisle.

"To close that credibility gap," he said, "we must take action on both ends of Pennsylvania Avenue to end the outsized influence of lobbyists, to do our work openly and to give our people the government they deserve."

Wooing Skeptical Voters

The president's emphasis on unity, jobs and the economy came as he faces an increasingly skeptical and divided national audience.

New surveys show that the anxious middle class, alarmed by the nation's historic debt and an incremental economic recovery that hasn't yet eased their circumstances or put a dent in unemployment, are expressing growing doubts about Obama's agenda and its cost, as well as his ability to effect change even while his party controls both chambers of Congress.

Though still personally popular, Obama's job approval rating has now dipped below 50 percent, and his party recently lost the 60-vote supermajority in the Senate needed to pass his health care overhaul in the face of united GOP opposition.

Perhaps most troubling to the White House: A new survey shows that nearly twice as many Americans believe the president has paid more attention to the problems of banks as Americans who say he has been focused on middle-class issues.

He attempted to address that perception with modest initiatives aimed at helping middle-class families, from increasing child care tax credits to increasing support for families caring for elderly relatives.

"Let's invest in our people without leaving them a mountain of debt," he said. "Let's meet our responsibility to the people who sent us here."

And in a speech that was part pep talk, Obama directly appealed to Americans' patriotism and "stubborn resilience" in a time of economic difficulties.

"We have finished a difficult year," said the president, who has three more to go. "We don't quit. I don't quit. Let's seize this moment to start anew, to carry the dream forward and to strengthen our union once more."